NI business recovery survey shows concern

Furthermore, over 50% of respondents indicated they are ‘concerned’ or ‘very concerned’ about their performance in the year ahead, with a further 29% saying they are ‘uncertain’.

The survey included members of Retail NI, Manufacturing NI and Hospitality Ulster and was conducted in September, prior to the latest Covid-19 restrictions being imposed across the province. The ‘Business Recovery Survey’ reveals that almost half (48%) of respondents anticipate their employee headcount being lower this time next year, with around two-thirds (65%) claiming that their turnover will be lower.

When asked by how much their employee headcount will change by this time next year, one quarter (25%) of businesses predicted that it would be ‘up to 25% lower’, with 17% saying ‘up to 50% lower’ and 6% saying ‘more than 50%’ lower. Only 9% of respondents said their headcount would be higher, with 44% saying it would be ‘similar’.

Just 12% of respondents predicted that their turnover would be higher this time next year, meanwhile, almost one quarter (23%) estimated that it would remain ‘similar’. Of those suggesting that their turnover would reduce over the coming year, 26% said it would be ‘up to 25% lower’, whilst 25% said it would be ‘up to 50%’ lower and 12% claimed it would be ‘more than 50% lower’.

Davy Elliott, from Duff & Phelps said: “Whilst these results are concerning, it is encouraging to note that respondents are proactively taking steps to protect their businesses and boost recovery efforts in the coming year and beyond.”

While 40% of respondents said they will consider restructuring their business in the next 12 months, 27% said they intend on repurposing or diversifying their product line. Sixteen percent will endeavour to renegotiate their existing lease terms, while 15% will seek to refinance their business.

“We have been involved in a number of restructuring cases where we’ve completed an independent review of the value of a business and its assets,” Mr Elliott added. “This has helped guide stakeholder assessment and decision making, particularly where multiple parties are involved, and brought the requisite level of independence and integrity to the process.”

The survey respondents also identified a range of support initiatives they will rely on to help their businesses recover from Covid-19 in the coming year. Over two-thirds (69%) of businesses will call upon government grants or loans, with 51% also relying on employee retention support. Two-fifths (41%) will seek to defer HMRC payments, while one quarter (26%) will seek new or additional bank lending and 37% will focus on marketing and promotional development activity. The overwhelming response came in relation to rates, with three quarters (75%) of businesses saying they will rely on the rates relief scheme in the coming year.

The chief executives of Trade NI, Glyn Roberts, Stephen Kelly and Colin Neill, said: “What comes across very clear from the survey of our respective memberships is the vital importance of the rates holiday and the need to extend it further from April 2021. If our economy is to stand any chance of recovery, further rates relief will be needed throughout next year to support our members as we rebuild our shattered economy.”

Anne O’Dwyer, managing director and co-head, Duff & Phelps Ireland, said: “The survey findings are consistent with what we’ve been seeing in the market over the last six months, whereby businesses have been looking to avail of government support packages to help navigate Covid-19-related financial challenges.”

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